Medical malpractice bill unveiled.

Individual state trial lawyer associations have been battling medical malpractice "reforms" introduced in various state legislatures for years. Currently, 17 states are either in the midst of or preparing for a medical malpractice tort "reform" fight. The battle has now moved beyond the state level into the U.S. Congress.

On April 25, Congressman James Greenwood (R-Pa.) introduced H.R. 4600, the HEALTH (Help Efficient, Accessible, Low-Cost, Timely Health Care) Act, a comprehensive proposal that would affect all health care liability actions.

The bill does nothing to reduce medical malpractice premiums for doctors. For injured patients, however, it would be devastating. Among other things, the bill imposes a restrictive statute of limitations; restricts a patient's recovery for noneconomic damages to an absolute limit of $250,000, regardless of how many defendants are named in the action; eliminates joint and several liability for all damages, economic and noneconomic; and places restrictions on punitive damages, including an elevated standard of proof that would make punitive damages virtually unrecoverable. The limits in the bill also apply to products liability actions against the manufacturers of drugs and medical devices.

"I have never seen a bill that is worse than this one for injured patients," said Linda Lipsen, ATLA's director of Public Affairs.

Punitive damages targeted

In addition to the extreme caps on damages and the one-sided caps on plaintiff attorney fees, Lipsen noted that the bill imposes a near-criminal standard for establishing whether punitive damages should be awarded, even in cases involving doctors who sexually abuse their patients or operate under the influence of alcohol. Proving flagrant disregard for a patient's safety would not be enough, under this bill, to trigger an award of punitive damages.

The bill purports to address the problem of rising medical malpractice premiums, but history shows that tort "reform" does not reduce premiums. In fact, a study by the Center for Justice and Democracy (CJ&D), Premium Deceit--the Failure of "Tort Reform" to Cut Insurance Prices, examined the impact of tort "reform" on nationwide insurance costs between 1985 and 1999. States that enacted caps on damages and other tort "reform" measures, it found, did not experience a reduction in their insurance premiums.

The sponsors of H.R. 4600 should heed the industry's response to the CJ&D study.

"[T]he insurance industry never promised that tort 'reform' would achieve specific premium savings," according to an American Insurance Association press release dated March 13.

Sherman Joyce, president of the American Tort Reform Association (ATRA), told Liability Week (July 19, 1999), "We wouldn't tell you or anyone that the reason to pass tort reform would be to reduce insurance rates."

"These ... remarks represent a shocking reversal of the long-held position of those seeking corporate immunity laws and remove one of the primary economic justifications for laws that limit consumers' legal rights," said Joanne Doroshow, executive director of the CJ&D and co-author of Premium Deceit.

While the medical community has bought into the false promise of rate relief, H.R. 4600 actually fails to address crucial elements that create higher premiums, particularly issues of patient safety and insurance companies' poor investment practices.

H.R. 4600 does nothing to reduce the incidence of malpractice or improve the level of patient safety in America's health care facilities. According to the Institute of Medicine, up to 98,000 people die each year as a result of medical errors. In many states, only a small percentage of doctors are responsible for a large percentage of medical malpractice claims.

The bill does nothing to control insurance company costs by, for example, implementing an "experience-rating" program through which doctors with clean records would pay less than doctors who have been disciplined or found guilty of medical negligence. It also fails to require greater disclosure after a doctor is disciplined or has lost his or her medical license in one state and is allowed to practice in another.

Doctors and insurers

The health care industry claims that high medical malpractice premiums are forcing doctors to quit their practices, change or limit their specialties, and leave one state to practice in another. These tired arguments continue to receive a good deal of media coverage, despite the rising number of licensed doctors in most states.

Proponents of H.R. 4600 ignore the role of the insurance companies that have made poor investment decisions, lost money in the stock market, and are now passing those losses on to doctors by charging their insureds more for medical malpractice coverage.

For example, the St. Paul Companies, which recently announced it would no longer sell medical malpractice insurance, lost $108 million because it invested in Enron. Meanwhile, on the same day the HEALTH Act was introduced in Congress, the St. Paul Companies announced a 10 percent increase in after-tax operating income for the first quarter of 2002-$169.2 million, compared with $159.6 million in the first quarter of 2001.

Ironically, the American Association of Health Plans unveiled a study--also the day before the medical malpractice bill was introduced-showing that of the 13.7 percent increase in health care premiums from 2001 to 2002, less than 1 percent is attributable to malpractice premiums.

Kristin Loiacono is media relations coordinator for ATLA.